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Annuitization Decisions Of Retirees: The Role Of Risk Aversion And Financial Advice

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Author Info

  • Swarn CHATTERJEE

    ()
    (Department of Housing & Consumer Economics, 205 Dawson Hall, University of Georgia, Athens, GA 30602)

  • John R. SALTER

    (ion of Personal Financial Planning, Texas Tech University, Lubbock, TX 79409)

  • Nathan HARNESS

    (Department of Accounting, Economics, & Finance, Texas A&M University— Commerce, Commerce, TX 75428)

Abstract

This study utilizes a nationally representative proprietary dataset to examine the annuitization decisions of retirees. The results indicate that consulting a financial advisor, retirement duration, and risk aversion are positive predictors of annuity ownership. The results also indicate that retirees with defined benefit plans are more likely to own annuities. Additionally, the results suggest that households with retirement duration of ten years or longer are more likely to start receiving their annuity distributions. This paper contributes to the research on annuitization decisions of retirees. The unique contributions of our study include establishing the relationship between risk aversion, financial advice, and annuity ownership decisions of households using a nationally representative dataset. Our empirical model controls for a number of socioeconomic, demographic and income related variables that have been drawn from prior literature.

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File URL: http://www.rebs.ro/issues/pdfs/9.pdf
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Bibliographic Info

Article provided by Alexandru Ioan Cuza University, Faculty of Economics and Business Administration in its journal Review of Economic and Business Studies.

Volume (Year): (2012)
Issue (Month): 9 (June)
Pages: 35-52

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Handle: RePEc:aic:revebs:y:2013:i:9:chatterjees

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Postal: Universitatea Al. I. Cuza; B-dul Carol I nr. 22; Iasi
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Related research

Keywords: risk aversion; Annuities; Retirement Decisions; Financial Planning;

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